Volato(US:SOAR)2025-05-15 20:43PART I FINANCIAL INFORMATION This section presents the company's unaudited consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2025 Financial Statements Presents the unaudited consolidated financial statements for the quarter ended March 31, 2025. These statements reflect a significant strategic shift towards aircraft sales and away from fleet operations, which are now classified as discontinued operations. The company reported a net income from continuing operations, a stark contrast to the net loss in the prior-year period, primarily driven by aircraft sales. However, the notes highlight a 'going concern' uncertainty due to negative working capital and a significant accumulated deficit Consolidated Balance Sheets Presents the company's financial position, detailing assets, liabilities, and shareholders' deficit as of March 31, 2025 and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $23,408 | $46,299 | | Total Current Assets | $20,922 | $43,314 | | Total Liabilities | $39,241 | $62,633 | | Total Current Liabilities | $39,123 | $62,200 | | Total Shareholders' Deficit | $(15,833) | $(16,334) | - Total assets and liabilities decreased significantly from year-end 2024, primarily due to the strategic shift and discontinued operations. The company maintains a significant shareholders' deficit15 Consolidated Statements of Operations Details the company's financial performance, including revenue, costs, and net income (loss) for the three months ended March 31, 2025 and 2024 Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenue | $25,483 | $48 | | Cost of Revenue | $20,987 | $52 | | Operating Income (Loss) | $2,526 | $(4,334) | | Net Income (Loss) from Continuing Operations | $360 | $(5,701) | | Net Income (Loss) from Discontinued Operations | $95 | $(11,689) | | Net Income (Loss) | $455 | $(17,390) | | Basic EPS | $0.24 | $(14.93) | | Diluted EPS | $0.03 | $(14.93) | - The company experienced a dramatic turnaround, shifting from a significant net loss to a net income, driven by a massive increase in revenue from $48 thousand to $25.5 million year-over-year17 Consolidated Statements of Changes In Shareholders' Deficit Outlines the changes in the company's shareholders' deficit, reflecting the impact of net income and other equity transactions during the quarter - The total shareholders' deficit improved slightly from $(16.3) million at the end of 2024 to $(15.8) million at the end of Q1 202519 - The improvement was primarily driven by a net income of $0.5 million for the quarter19 Consolidated Statements of Cash Flows Summarizes the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024 Q1 2025 vs. Q1 2024 Cash Flows (in thousands) | Cash Flow Category | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(312) | $(7,697) | | Net Cash Provided by (Used in) Investing Activities | $21 | $(56) | | Net Cash Used in Financing Activities | $(1,133) | $(683) | | Net Decrease in Cash | $(1,424) | $(8,436) | - Cash used in operating activities decreased substantially from $7.7 million in Q1 2024 to $0.3 million in Q1 2025, reflecting improved operational performance and changes in working capital22 Notes to Consolidated Financial Statements Provides detailed explanations and additional information supporting the consolidated financial statements, including significant accounting policies and key disclosures - Going Concern: The company has negative working capital of $18.2 million and an accumulated deficit of $103.9 million, which raises substantial doubt about its ability to continue as a going concern. Management plans to fund operations through aircraft sales and future debt/equity financing303132 - Strategic Shift: In September 2024, the company transitioned its aircraft ownership fleet operations to flyExclusive, Inc. to focus on high-growth areas like aircraft sales and proprietary software (Vaunt platform). These former operations are now reported as discontinued2782 - Discontinued Operations: For Q1 2025, discontinued operations generated a net income of $95 thousand, compared to a net loss of $11.7 million in Q1 202483 - Revenue Breakdown: Q1 2025 revenue was dominated by aircraft sales ($25.1 million), with subscription revenue contributing $383 thousand. This is a major shift from Q1 2024, which had no aircraft sales57 - Aircraft Commitments: The company has commitments to acquire two additional Gulfstream G-280 aircraft in 2025, with total expected contractual payments of $26.7 million137188 - Legal Contingencies: The company is a defendant in a lawsuit alleging violations of the Worker Adjustment and Retraining Notification (WARN) Act due to the termination of 230 employees in August 2024. The current range of loss cannot be estimated149 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic transition away from fleet operations to focus on aircraft sales and proprietary software, which drove a significant revenue increase and a shift to net income in Q1 2025. The discussion also highlights liquidity challenges and a going concern uncertainty, outlining plans to fund operations through aircraft sales and potential financing - The company's business model has shifted to focus on aircraft sales and software-as-a-service subscriptions, following the transition of its aircraft ownership program fleet operations to flyExclusive in September 2024159160 Q1 2025 Financial Highlights | Metric | Q1 2025 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $25.5 million | +$25.4 million | | Net Income from Continuing Operations | $0.4 million | Improved from $5.7M loss | | Net Income | $0.5 million | +$17.8 million improvement | - The $25.4 million revenue increase was primarily driven by the sale of the company's second Gulfstream G280 aircraft during the quarter167 - Selling, general and administrative (SG&A) expenses decreased by 55% to $2.0 million, reflecting cost savings from the strategic shift away from fleet operations165169 - Management acknowledges substantial doubt about the company's ability to continue as a going concern due to historical negative cash flows and losses. They believe current cash, anticipated margins from aircraft sales, and future financing will fund operations for at least one year176 Quantitative and Qualitative Disclosures about Market Risk The company, as a "smaller reporting company," is not required to provide quantitative and qualitative disclosures about market risk - As a "smaller reporting company" defined in Rule 12b-2 of the Exchange Act, the company is exempt from providing these disclosures200 Controls and Procedures Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level, and no material changes to internal controls over financial reporting occurred during the quarter - An evaluation conducted by management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025203 - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls204 PART II OTHER INFORMATION This section provides additional disclosures including legal proceedings, risk factors, and other regulatory information Legal Proceedings The company is involved in various legal proceedings arising from the normal course of business, with further details provided in Note 15 of the financial statements, including a lawsuit related to the WARN Act - The company is periodically involved in legal proceedings. For more detailed information, the report refers to Note 15 of the unaudited financial statements206 - Note 15 details a lawsuit filed against the company related to the Worker Adjustment and Retraining Notification (WARN) Act following the termination of 230 employees149 Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The company states there have been no material changes from the risk factors disclosed in its Form 10-K for the year ended December 31, 2024208 Unregistered Sales of Equity Securities and Use of Proceeds During the quarter ended March 31, 2025, the company did not sell any unregistered securities and did not repurchase any of its common stock - The company did not sell any unregistered securities during the quarter ended March 31, 2025209 - No shares of Common Stock were repurchased by the company during the quarter210 Defaults Upon Senior Securities The company reported no defaults upon senior securities during the reporting period - There were no defaults upon senior credit facilities211212 Mine Safety Disclosures This item is not applicable to the company's operations - This section is not applicable to the company214 Other Information No information required to be reported on Form 8-K was omitted during the quarter, and there were no material changes to the procedures for shareholder nomination of directors - No information that should have been disclosed in a Form 8-K was omitted during the quarter217 Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and certifications required by the Sarbanes-Oxley Act - The report includes an index of exhibits filed, such as the Certificate of Incorporation, Bylaws, and CEO/CFO certifications pursuant to the Sarbanes-Oxley Act220